Total (financial and non-financial) credit in the United States jumped $484 billion during the first quarter to a record $59.399 trillion, or 347% of gross domestic product. Although economic growth faltered during the period, Q1 2014 Total Non-Financial Debt (NFD) expanded at a 5.0% rate. Corporate borrowings grew

at a robust 9.3% pace, up from Q4ís 7.7% and Q1 2013ís 7.2%.

Federal government debt mounted at a 7.1% rate, down from Q4ís 11.6% and Q1 2013ís 10.1%. Consumer Credit accelerated from Q4ís 5.3% rate to 6.6% - the strongest increase in borrowings since Q2 2012. Consumer Credit expanded 4.1% in 2011, 6.2% in 2012 and 5.9% in 2013. If Q1 consumer borrowing is sustained, 2014 will post the strongest consumer (non-mortgage) debt growth since 2001 (8.6%).

The historic increase in federal debt runs unabated. Recall that federal government debt expanded 24.2% in 2008, 22.7% in 2009, 20.2% in 2010, 11.4% in 2011, 10.9% in 2012 and 6.5% in 2013. Federal debt has increased $9.718 trillion, or 145%, in 23 quarters.

The ongoing expansion of corporate debt is also noteworthy. Corporate debt expanded 8.3% in 2012 and another 8.9% in 2013 - significantly exceeding the growth in the real economy. We're in the midst of the strongest corporate debt expansion since the 9.2% in 2006 followed by 13.5% in 2007. More...
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